The Duke and Duchess of York’s 26-year-old daughter was hoping to move into Ivy Cottage by the end of last year before announcing her engagement to nightclub manager Jack Brooksbank, her boyfriend of six years.

But damp has been discovered in the basement of the three-bedroom home and insiders have revealed it could cost “thousands of pounds” to treat.

A source said: “Eugenie’s family don’t want to pay for the repairs because they don’t own the building but the powers-that-be are refusing to come up with the cash as well.

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Princess Eugenie was hoping to move into Ivy Cottage by the end of last year

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Eugenie is eighth in line to the throne

Eugenie’s family don’t want to pay for the repairs because they don’t own the building

Source

“At the moment it’s a stand-off and the whole thing is in limbo.

“The problem is that normally repair work would be done to several properties at once to keep costs down but there are no plans for neighbouring buildings at the moment.

“It’s true to say there have been some heated discussions with certain individuals digging their heels in, but so far there has been little give and take. Something will have to give soon if Eugenie and Jack are to move in quickly.”

The row will re-ignite the whole debate about minor royals living in palaces at reduced rents.

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Her father, Prince Andrew, received a reported £15million for his former home

Eugenie, who is eighth in line to the throne, has been living in an apartment at St James’s Palace with older sister Princess Beatrice.

Their father Prince Andrew received a reported £15million for his former home Sunninghill Park when he sold it to Kazakh tycoon Timur Kulibayev in 2007.

The house had cost Andrew nothing as it was a gift from the Queen after he married Sarah Ferguson in 1986. In 2014 the Prince and his ex-wife spent £13million buying a chalet in the Swiss ski resort of Verbier, where they spend several holidays a year.

After police cutbacks saw Scotland Yard minders withdrawn for Beatrice and Eugenie, a furious Andrew began paying for private security to protect his daughters but insiders say he is reluctant to fork out his own cash to renovate the cottage.

Princess Eugenie in pictures Tue, August 9, 2016

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Princess Eugenie poses for the September issue of Harper's Bazaar (www.harpersbazaar.com/princesseugenie)

The Sunday Express revealed in August that Eugenie and Jack, 29, were intending to get engaged in 2016 and marry this year.

A source said of Ivy Cottage: “It’s a cosy cottage and an ideal first home.

“It was once lived in by the family of a soldier injured in the First World War and has also been used by staff.

“It needs some work and so it’s going to take some weeks to do up.”

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Eugenie and Jack Brooksbank, her boyfriend of six years, announced their engagement last year

Eugenie is close to her cousin Prince Harry, who lives next door in Nottingham Cottage, which he has been sharing in recent weeks with his American girlfriend Meghan Markle.

Added the insider: “Eugenie is obviously a bit upset as she was hoping to be making wedding plans by now.

“She was really looking forward to moving in and creating a warm and welcoming home, but it seems she will just have to be patient until this is resolved.”